At this stage, the main problem with Tier 1 blockchains is the lack of scalability in DeFi. Blockchain projects have been working on ways to increase scalability for years, but have not yet come up with a single solution. Scalability is one of the most important things, without it, blockchain applications will remain solely in cryptocurrencies without any move to the next level of integration and use for enterprise level organizations. This article will focus on the Sei project.
Sei is a Layer-1 blockchain based on the CLOB central order book. This makes Sei an aggregator, meaning it allows not only integration with the dApp on its own blockchain, but also the all ecosystems to use its liquidity and create markets for assets on Sei.
Sei is an open-source Layer 1 blockchain that was built to address the trading scalability problem. Sei is the fastest Layer 1 for trading, optimizing every layer of the stack to offer the best infrastructure for trading apps. Sei's unique value proposition lies in its singular focus on the trading function. By optimizing its infrastructure for trading apps, any gaming economy, NFT marketplace, or DeFi DEX, will operate better on Sei than on any other Layer 1.
Over the past few years, the blockchain industry has been looking for a solution to the "trilemma"-how to achieve scalability, security and decentralization-but the iteration of exchange mechanisms has yet to provide an answer. Although the underlying infrastructure has been rewritten to some extent, we believe that a complete reworking of that infrastructure will be the key to solving this trilemma.
The Exchange trilemma can be solved using the Cosmos SDK and Tendermint Core. Three major features can be added to improve performance. The first, "Twin Turbo Consensus," optimizes the block distribution and block processing elements of Tendermint and Cosmos, reducing the time to completion from 300 ms to 600 ms. The second, Parallelization, increases throughput to 22,000 operations per second. Finally, a proprietary order-matching mechanism built into the chain itself allows exchanges to create new markets. This has many advantages: it helps exchanges scale, prevents outperformance, and provides a better experience for market makers by grouping orders. Using these measures, exchanges can scale while maintaining decentralization and capital efficiency.
CLOB - central order book
Combining internal security and decentralization with autonomous speed and efficiency.
Most solutions in traditional financial applications use CLOB to create markets. It's a great tool if you have low fees and substantial liquidity. But cryptocurrencies typically use an automated market maker (AMM) model because it does not require constant order updates and can handle much smaller volumes of liquidity.
Sei can offer users low transaction fees and work with AMM for large volumes of liquidity. As a result we have a decentralized and permission-free way of trading based on a book of orders, a true decentralized trading! This approach opens up many different use cases that were previously impossible to implement with the AMM model.
Sei is the first Tier 1 blockchain uniquely optimized for DeFi. Sei aims to create a fast, decentralized exchange with the same functionality and usability as centralized exchanges, with minimal commissions, without KYC and without transferring its funds to centralized organizations, which in light of the recent increase in the number of large exchanges' scams is just the ideal solution. In addition, the Sei blockchain has a record transaction speed of 600 milliseconds (0.6 sec).
In an interview, a Sei co-founder said the following:
"Current order execution rates on blockchain networks are a 'deal breaker' for institutional market makers seeking access to the sector."
In addition to scalability, the project has a strong focus on security:
Sei is protected by some of the most reputable organizations and validators in the world.
Creating new financial products:
Sei makes possible new types of financial products that require high-speed transaction execution and great scalability - from real-time sports betting to options and futures.
As the first concrete use case for Layer 1, Sei opens up a new space for designing financial applications in Web3.
In focusing on trading, Sei has created a compelling offering for developers looking to build on a general-purpose Layer 1. Trading is universally important to all applications in Web3, including gaming, social, and NFTs. By catering to this fundamental need, Sei creates a gravitational pull for users to come explore any kind of application built on Sei because trading is general purpose. There are hundreds of promising teams building on the Sei ecosystem, some moving from the largest Layer 1s and Layer 2s such as Ethereum, Solana, zkSync, Polygon and Sui.
The team, sponsors.
Founded by Jeff Feng and Jay Jog, the Sei team brings together people with experience at technology and trading companies Robinhood, Databricks, Airbnb, Goldman Sachs and others.
"Most exchanges use smart contracts on top of layer-1 blockchain, so if you're trying to improve exchange performance, you can't do anything with layer-1," Jog said. "In our case, we've added an order matching mechanism to layer-1 itself, which greatly improves the performance and experience of the exchanges."
"Teams that had already raised venture funding and launched their applications but felt their current layer-1 ecosystems lacked something that allowed them to really scale and provide a better user experience, so they came to us," Feng said. "All of these teams came to us without any incentives."
Sei Network offers the ecosystem the best DEX solution available today, with the advantages of both centralized exchanges and decentralized products. With oracle modules and combining order books from all decentralized exchanges, users get more liquidity, fair pricing and trading security. All this in symbiosis with very low transaction fees and fast block completion creates a truly unique product. In general, the project is very interesting, for more information you can click on the links below.
Join the community
Website: https://www.seinetwork.io/
Twitter: https://twitter.com/seinetwork
Telegram: https://t.me/seinetwork
GitHub: https://github.com/sei-protocol
Gitbook: https://docs.seinetwork.io/introduction/overview
Block Explorer: https://sei.explorers.guru/
Medium: https://medium.com/@seinetwork